Canada Petroleum Resources Act (R.S.C., 1985, c. 36 (2nd Supp.))

Marginal note:Information may be disclosed

• 34 (1) The Minister may, notwithstanding section 101, provide information or documentation relating to a significant discovery to any interest owner who requires such information or documentation to assist the interest owner in complying with an order made under subsection 33(1).

• Marginal note:Idem

  (2) An interest owner shall not disclose any information or documentation provided to that interest owner under subsection (1) except to the extent necessary to enable the interest owner to comply with an order made under subsection 33(1).

PART IVProduction

Commercial Discoveries

Marginal note:Application for declaration of commercial discovery

• 35 (1) Where a commercial discovery has been made on any frontier lands that are subject to an interest or a share therein held in accordance with section 23, the Commission of the Canadian Energy Regulator shall, on the application of the interest holder of the interest or the share, made in the form and manner and containing such information as may be prescribed, make a written declaration of commercial discovery in relation to those frontier lands in respect of which there are reasonable grounds to believe that the commercial discovery may extend.

• Marginal note:Declaration on initiative of Commission of the Canadian Energy Regulator

  (2) Where a commercial discovery has been made on any frontier lands, the Commission of the Canadian Energy Regulator may, by order, make a declaration of commercial discovery in relation to those frontier lands in respect of which there are reasonable grounds to believe that the commercial discovery may extend.

• Marginal note:Application of certain provisions

  (3) Subsections 28(3) to (6) apply, with any modifications that the circumstances require, with respect to a declaration made under subsection (1) or (2).

• Marginal note:Procedures

  (4) The procedures described in section 382 of the Canadian Energy Regulator Act apply to the making, amendment or revocation of a declaration under this section.

• Marginal note:Delegation

  (5) The Commission of the Canadian Energy Regulator may delegate any of its powers under this section to a member, officer or employee of the Commission, who shall exercise the powers in accordance with the terms of the delegation.

Development Orders

Marginal note:Notice of order to reduce term of interest

• 36 (1) The Minister may, at any time after the Commission of the Canadian Energy Regulator has made a declaration of commercial discovery, give notice to the interest owner of any interest in relation to any portion of the commercial discovery area where commercial production of petroleum has not commenced before that time stating that, after any period of not less than six months that may be specified in the notice, an order may be made reducing the term of that interest.

• Marginal note:Opportunity for submissions

  (2) During the period specified in a notice sent to an interest owner under subsection (1), the Minister shall provide a reasonable opportunity for the interest owner to make such submissions as the interest owner considers relevant to determining whether the Minister should make an order reducing the term of the relevant interest.

• Marginal note:Order reducing term of interest

  (3) Notwithstanding any other provision of this Act, where the Minister is of the opinion that it is in the public interest, he may, at any time not later than six months after the expiration of the period specified in a notice in respect of an interest sent under subsection (1), by order subject to section 106, reduce the term of the interest to three years after the date the order is made or such longer period as may be specified in the order.

• Marginal note:All interests cease

  (4) Notwithstanding any other provision of this Act but subject to subsections (5) and (6), where an order is made under subsection (3), any interest in respect of frontier lands within the area to which the interest that is the subject of the order applied on the date the order was made ceases to have effect at the end of the period specified in the order.

• Marginal note:Order ceases to have effect where production commences

  (5) Where commercial production of petroleum on any portion of the frontier lands referred to in subsection (4) commences before the expiration of the period specified in an order made under subsection (3) or the period extended pursuant to subsection (6), the order ceases to have effect and is deemed to have been vacated.

• Marginal note:Extension of period

  (6) The Minister may extend the period specified in an order made under subsection (3) or may revoke the order.

Issuance of Production Licences

Marginal note:Rights under production licence

• 37 (1) A production licence confers, with respect to the frontier lands to which the licence applies,

  • (a) the right to explore for, and the exclusive right to drill and test for, petroleum;

  • (b) the exclusive right to develop those frontier lands in order to produce petroleum;

  • (c) the exclusive right to produce petroleum from those frontier lands; and

  • (d) title to the petroleum so produced.

• Marginal note:Exception

  (2) Notwithstanding subsection (1), the Minister may, subject to such terms and conditions as the Minister deems appropriate, authorize any interest holder of an interest or a share therein to produce petroleum on the frontier lands subject to the interest or share for use in the exploration or drilling for or development of petroleum on any frontier lands.

Marginal note:Issuance of production licence

• 38 (1) Subject to section 44, the Minister, on application made in the form and manner and containing such information as may be prescribed,

  • (a) shall issue a production licence to one interest owner, in respect of any one commercial discovery area or portion thereof that is subject to an exploration licence or a significant discovery licence held by that interest owner; and

  • (b) may, subject to such terms and conditions as may be agreed on by the Minister and the relevant interest owners, issue a production licence to

    • (i) one interest owner, in respect of two or more commercial discovery areas or portions thereof that are subject to an exploration licence or a significant discovery licence held by that interest owner, or

    • (ii) two or more interest owners, in respect of one or more commercial discovery areas or portions thereof that are subject to an exploration licence or a significant discovery licence held by any of those interest owners.

• Marginal note:Production licence in relation to Crown reserve lands

  (2) Where a declaration of commercial discovery is in force and the commercial discovery area extends to Crown reserve lands, the Minister may, after making a call for bids in relation to those Crown reserve lands or any portion thereof and selecting a bid submitted in response to the call in accordance with subsection 15(1), issue a production licence to the person who submitted that bid in relation to the Crown reserve lands specified in the call.

• Marginal note:Terms and conditions of production licence

  (3) A production licence shall be in the form prescribed and may contain any terms and conditions, not inconsistent with this Act or the regulations, as may be agreed on by the Minister and the interest owner of the production licence.

Marginal note:Consolidation of production licences

39 The Minister may, on the application of the interest owners of two or more production licences, consolidate those production licences into a single production licence, on such terms and conditions as may be agreed on by the Minister and those interest owners.

Marginal note:Reduction of lands subject to production licence

• 40 (1) Where a commercial discovery area in relation to a declaration of commercial discovery is decreased pursuant to an amendment made under subsections 28(4) and 35(3), any production licence that was issued on the basis of that declaration shall be amended by decreasing accordingly the frontier lands subject to that licence.

• Marginal note:Increase in lands subject to production licence

  (2) Where a commercial discovery area in relation to a declaration of commercial discovery is increased pursuant to an amendment made under subsections 28(4) and 35(3), any production licence that was issued on the basis of that declaration shall be amended to include all portions of the amended commercial discovery area that are subject to an exploration licence or a significant discovery licence held by the interest owner of that production licence at the time the commercial discovery area is so increased.

Marginal note:Term of production licence

• 41 (1) Subject to subsections (2) to (4), a production licence is effective from the date it is issued and shall be issued for a term of twenty-five years.

• Marginal note:Idem

  (2) Where a declaration of commercial discovery on the basis of which a production licence was issued is, pursuant to subsections 28(4) and 35(3), revoked or amended to exclude all portions of the commercial discovery area in relation to which the production licence was issued, the production licence ceases to be in force.

• Marginal note:Automatic extension of term

  (3) Where, on the expiration of the term of a production licence, petroleum is being produced commercially, the term is extended for such period thereafter during which commercial production of petroleum continues.

• Marginal note:Discretionary extension of term

  (4) The Minister may, by order, on such terms and conditions as may be specified in the order, extend the term of a production licence where

  • (a) commercial production of petroleum from the frontier lands subject to the licence ceases before or on the expiration of the twenty-five year term of the production licence and the Minister has reasonable grounds to believe that commercial production from those lands will recommence; or

  • (b) the Minister has reasonable grounds to believe that commercial production of petroleum from those lands will, at any time before or after the expiration of the term of the licence, cease during any period and thereafter recommence.

Marginal note:Lapsing of other interests

• 42 (1) On the issuance of a production licence, any interest in relation to the frontier lands in respect of which the production licence is issued held immediately prior to the issuance of the production licence ceases to have effect in relation to those frontier lands, but otherwise continues to have effect according to its terms and the provisions of this Act.

• Marginal note:Lands become Crown reserve lands on expiration of term

  (2) On the expiration of a production licence, the frontier lands in relation to which the production licence was issued become Crown reserve lands.

Subsurface Storage Licences

Marginal note:Licence for subsurface storage

• 43 (1) The Minister may, subject to any terms and conditions the Minister considers appropriate, issue a licence for the purpose of subsurface storage of petroleum or any other substance approved by the Minister in frontier lands at depths greater than twenty metres.

• Marginal note:Prohibition

  (2) No frontier lands shall be used for a purpose referred to in subsection (1) without a licence referred to therein.

Qualification for Production Licence

Marginal note:Qualification for production licence

44 No production licence or share in a production licence may be held by any person other than a corporation incorporated in Canada.

PART V[Repealed, 1993, c. 47, s. 3]

PART VIRoyalties

Interpretation

Marginal note:Definition of assessment

54 In this Part, assessment includes reassessment.

Payment of Royalties

Marginal note:Royalties

• 55 (1) There are hereby reserved to Her Majesty in right of Canada, and each holder of a share in a production licence is liable for and shall pay, in accordance with the regulations, such royalties as may be prescribed, at the rates prescribed, in respect of petroleum produced from frontier lands and in respect of the periods prescribed.

• Marginal note:Payable in money or in kind

  (2) The Minister may require all or part of any royalty payable under this Part to be paid in money or in kind in accordance with the regulations.

• Marginal note:Reduction of royalties or exemptions

  (3) The Governor in Council may, by order, authorize the reduction of, or the exemption from the payment of, any royalty payable under this Part for such periods, in such amounts and subject to such conditions as may be specified in the order.